Renting out my house - total novice - advice please

Catblue

SuzieSue wrote: »

If the system is unfair, you can't blame people for not following the correct procedures - the system needs to be changed.

Of course you can blame people for not following the correct procedures. Who else could you blame?

Presumably if you get hit by an uninsured driver and spend years recovering from the accident, you would immediately say "Oh, I cannot possibly hold the uninsured driver responsible for drinking 20 pints of Stella and smashing into me. Apparently it was too expensive and somewhat difficult for him to get insurance. Oh, and you know what? I didn't have any insurance either. Still, it is not his fault, not my fault but the fault of the insurance companies who didn't insure either of us. The system failed us".

Laughable right?

a1a1a1

Hi all, thanks again for all your advice. I'm going to give HSBC a call in the morning to see where I stand.

Has anyone got any experience of going through this with HSBC? (Although I presume it varies due to individual circumstances).

Fire_Fox

SuzieSue wrote: »

But it needn't be an issue and no tenants would suffer if lenders were obliged to be open about their policy before borrowers took out a mortage. As it is at the moment, lenders can change their policy as and when they want and this is what causes the problems and harms everyone especially tenants.

If the system is unfair, you can't blame people for not following the correct procedures - the system needs to be changed.

The problem is not lenders changing their policy, it's homeowners not reading the small print and not planning for a rainy day. People don't expect their relationship to break down, they don't expect to end up in negative equity. Why on earth not? It's not like either are unique events! In general let properties are higher risk than owner-occupied, the banks are simply being prudent.

You aren't asking for the lenders to be open, I doubt that any bank would have refused to tell their customer what the policy was on consent to lease if they had asked. The bank stumps up a substantial sum of money on the basis that you live in the house and pay them back regularly, there is nothing unfair about being expected to adhere to your side of the bargain.

dopester

Isn't it true that if a lender finds out that you are renting your home without permission, quite a few lenders can seek for the entire outstanding mortgage to be paid on demand?

Or they have greater power to seize the property, with less court work, and throw it into auction to recover their money? Not caring if you have equity which takes a massive hit, or that it will bring you a stack more negative equity at the open sale price it achieves at auction.

I would have thought there'd be a risk your landlord insurance for a property you rent out could be invalidated (even if you take out landlords insurance) - if the insurer later learnt/investigated, and found out you didn't have the lender's permission to rent it out.

I've read some shocking cases recently with insurers looking for ways to wriggle out of claims, but if I it was my firm insuring the property.. you made a claim cause it burnt down... we wouldn't be paying out on your policy if you didn't have permission to let it out.

Anyway.. for all those thinking it's no big deal to not get lenders' permission, don't come back here crying your tale of woe if you get educated by things which happen in the real world.

mhr035

I can't blame anyone for thinking of taking the "dishonest" route. My partner works away from home (for the past 9 months) due to work commitments and current economic climate. We spoke to our lender (Halifax) to turn our residential mortgage into a Consent to Lease. Their offer: adding 2% to the current variable rate and a £1000 fee and we are on 60% LTV. Now we're thinking of BTL or selling up. The worst part we have dodgy neighbours as well - so stuck between the devil and the deep blue ocean.

detroidam

DVardysShadow wrote: »

There is a world of difference in the law, but not in the morality.

Having taxi insurance is necessary to recompense customers for the consequences of mishandling the taxi

Getting the consent of your lender to rent out is necessary to protect customers from the consequences of mishandling your finances.

SO, as I see it, the law is deficient. But if there is a moral case for doing something, decent people don't need the law.

Morality is a very complex issue - morality is ultimately about right and wrong but the question is who are the guardians of morality? i.e who decides who is right and wrong? (Is it wrong to steal a loaf of bread to feed your family?)

What you may argue is right or wrong may be different to what others believe. You could certainly argue that by needlessly giving more money to an evil multinational banking corporation that have just brought the world economy to its knees, blighting millions around the world and may use part of that money to trade in arms shares is much more 'immoral' that simply not telling that banking corporation about your change in circumstances.

Save your money - or give that saving to some homeless charity - but don't waste it giving more of 'our' money to the banks.

a1a1a1

Detroitan - Very deep!

Anyone know of the best insurance companies for landlords to use?

Phirefly

This is interesting...

to Let out a property where you still have a mortgage on it you need your banks permission or else you’ll be breaking your mortgage terms and they could take your property off you. A Consent-to-Lease is an option but with the current economical climate hitting a rocky patch and with house prices plummeting most lenders are capping the minimum LTV acceptance to 85%. Now as I discovered with my Lender they may not have applied the same limited on Variable mortgages as you aren’t technically on a Mortgage Product. So if you find yourself in the same scenario there may be a loop hole you can jump through.

jjo_3

You will need to pay tax on your property income- half needs to be claimed by you, half by your partner. You need to let HMRC know within three months of receiving this income. Call your tax office for some general advice, you do not need to provide your details. Ask to speak to a technical advisor.

SuzieSue

a1a1a1 wrote: »

Detroitan - Very deep!

Anyone know of the best insurance companies for landlords to use?

Not sure about "best", but SimpleLandlordsInsurance is worth considering.